Organizations need to raise money for any number of reasons, for example to finance corporate activities like new investments or business expansions or to support government spending like funding infrastructure, libraries, or parks projects.
Organizations then create something called debt (like a loan) that is sliced up and sold in smaller units. For example, a $1 million debt may be allocated to one-thousand bonds each one valued in $1,000. Anyone who buys at least 1 bond becomes a creditor of the organization.
In return to this money, the buyer is paid a pre-established number of interest payments at either a fixed or variable interest rate. When the bond expires, or "reaches maturity," the payments cease and the original investment is returned.
A bond is simply money lend to an organization (that can be a company or a government body).
Now that we have notions about what a bond is, we can have a look to what we should look at if we want to know how to pick a bond for our #imap journey.
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